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07-1480-cv(L), 07-1511-cv(CON) United States Court of Appeals for the
Second Circuit
THE CARTOON NETWORK LP, LLLPand CABLE NEWS NETWORK LP, LLLP,
PlaintiffsCounterclaim-DefendantsAppellees , TWENTIETH CENTURY FOX FILM CORPORATION, UNIVERSAL CITY
STUDIOS PRODUCTIONS LLLP, PARAMOUNT PICTURES CORPORATION,DISNEY ENTERPRISES, INC., CBS BROADCASTING INC., AMERICAN
BROADCASTING COMPANIES, INC., and NBC STUDIOS, INC., PlaintiffsCounterclaim-DefendantsAppellees ,
v. CSC HOLDINGS, INC. and CABLEVISION SYSTEMS CORPORATION,
DefendantsCounterclaim-PlaintiffsThird-Party-PlaintiffsAppellants , _______________________________
(For Continuation of Caption See Inside Cover) ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
BRIEF OF PLAINTIFFSCOUNTERCLAIM-DEFENDANTSAPPELLEESTHE CARTOON NETWORK LP, LLLP, ET AL. (TURNER)
Katherine B. ForrestAntony L. RyanCRAVATH , SWAINE & MOORE LLPWorldwide Plaza825 Eighth Avenue
New York, New York 10019
(212) 474-1000 Attorneys for PlaintiffsCounterclaim-DefendantsAppellees The Cartoon
Network LP, LLLP and Cable News Network LP, LLLP and Third-Party-Defendants Appellees Turner Broadcasting System, Inc., Turner Network Sales, Inc.,
Turner Classic Movies LP, LLLP and Turner Network Television LP, LLLP
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v.
TURNER BROADCASTING SYSTEM, INC., CABLE NEWS NETWORK LP, LLP, TURNER NETWORK SALES, INC., TURNER
CLASSIC MOVIES, L.P., LLLP, TURNER NETWORK TELEVISION LP, LLLP,and THE CARTOON NETWORK LP, LLP,
Third-Party-DefendantsAppellees.
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Corporate Disclosure Statement
Pursuant to Federal Rule of Appellate Procedure 26.1, the under-
signed counsel for The Cartoon Network LP, LLLP certifies that The Cartoon
Network, Inc. (formerly known as The Cartoon Network LP, LLLP) is jointly
owned by Turner Entertainment Networks, Inc. and TEN Investment Company,
Inc., both of which are wholly owned indirect subsidiaries of Turner Broadcasting
System, Inc. The Cartoon Network, Inc. is ultimately and indirectly owned by
Time Warner Inc., a publicly traded company. No publicly traded company has a
10 percent or greater stock ownership in Time Warner Inc.
Pursuant to Federal Rule of Appellate Procedure 26.1, the under-
signed counsel for Cable News Network LP, LLLP certifies that Cable News
Network, Inc. (an entity that was formed following the merger of Cable News
Network LP, LLLP into CNN Investment Company, Inc.) is owned entirely by
Turner Broadcasting System, Inc. Cable News Network, Inc. is ultimately and
indirectly owned by Time Warner Inc., a publicly traded company. No publicly
traded company has a 10 percent or greater ownership in Time Warner Inc.
Pursuant to Federal Rule of Appellate Procedure 26.1, the under-
signed counsel for Turner Broadcasting System, Inc. certifies that it is jointly
owned by Historic TW Inc., American Television and Communications Corpora-
tion, Warner Communications, Inc., United Cable Turner Investment, Inc. and
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Time Warner Companies, Inc. Turner Broadcasting System, Inc. is ultimately and
indirectly owned by Time Warner Inc., a publicly traded company. No publicly
traded company has a 10 percent or greater stock ownership in Time Warner Inc.
Pursuant to Federal Rule of Appellate Procedure 26.1, the under-
signed counsel for Turner Network Sales, Inc. certifies that it is owned entirely by
Turner Broadcasting System, Inc. Turner Network Sales, Inc. is ultimately and
indirectly owned by Time Warner Inc., a publicly traded company. No publicly
traded company has a 10 percent or greater stock ownership in Time Warner Inc.
Pursuant to Federal Rule of Appellate Procedure 26.1, the under-
signed counsel for Turner Classic Movies LP, LLLP certifies that Turner Classic
Movies, Inc. (formerly known as Turner Classic Movies LP, LLLP) is jointly
owned by Turner Entertainment Networks, Inc. and TEN Investment Company,
Inc., both of which are wholly owned indirect subsidiaries of Turner Broadcasting
System, Inc. Turner Classic Movies, Inc. is ultimately and indirectly owned by
Time Warner Inc., a publicly traded company. No publicly traded company has a
10 percent or greater stock ownership in Time Warner Inc.
Pursuant to Federal Rule of Appellate Procedure 26.1, the under-
signed counsel for Turner Network Television LP, LLLP certifies that Turner
Network Television, Inc. (formerly known as Turner Network Television LP,
LLLP) is jointly owned by Turner Entertainment Networks, Inc. and TEN
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Investment Company, Inc., both of which are wholly owned indirect subsidiaries
of Turner Broadcasting System, Inc. Turner Network Television, Inc. is ultimately
and indirectly owned by Time Warner Inc., a publicly traded company. No
publicly traded company has a 10 percent or greater stock ownership in Time
Warner Inc.
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Table of Contents
Page
Table of Authorities ................................................................................................. iii
Citation Conventions............................................................................................... vii
Preliminary Statement................................................................................................1
Issues Presented .........................................................................................................3
Statement of the Case.................................................................................................4
Statement of Facts......................................................................................................6
The Parties .......................................................................................................6
Cablevisions Design and Operation of the RS-DVR Service ........................9
How Cablevision Copies Programming in the RS-DVR Service .................12
How Cablevision Transmits Programming in the RS-DVRService ...........................................................................................................17
Fundamental Differences Between the RS-DVR Service and aSet-Top DVR Box .........................................................................................20
Cablevision Refuses to Negotiate a License for the RS-DVRService ...........................................................................................................21
Summary of Argument.............................................................................................22
Standard of Review..................................................................................................24
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Table of Contents
Page
ii
Argument..................................................................................................................25
I. CABLEVISION MAKES UNAUTHORIZED COPIES OFTURNERS COPYRIGHTED PROGRAMMING ANDSTORES THEM INDEFINITELY. ..............................................................27
A. Cablevision Is Directly Liable for the UnauthorizedCopies that It Makes at the Request of Its Subscribers.......................27
B. Cablevisions Reliance on Netcom Is Misplaced................................34
C. Sony Is Legally and Factually Inapposite............................................41
D. Cablevisions References to Set-Top DVR Boxes AreUnavailing. ..........................................................................................45
II. CABLEVISION MAKES UNAUTHORIZED COPIES OFTURNERS COPYRIGHTED PROGRAMMING WITHOUTRECEIVING ANY SUBSCRIBER REQUESTS. ........................................48
A. The Buffer Copies Are Fixed. .........................................................49
B. The Buffer Copies Are Not De Minimis . ............................................54
III. CABLEVISION MAKES UNAUTHORIZEDTRANSMISSIONS OF TURNERS COPYRIGHTEDPROGRAMMING TO SUBSCRIBERS FOR ON DEMANDVIEWING......................................................................................................56
Conclusion ...............................................................................................................56
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iii
Table of Authorities
Page
Cases
Advanced Computer Servs. of Mich., Inc. v. MAI Sys. Corp. ,845 F. Supp. 356 (E.D. Va. 1994) .......................................................................53
Basic Books, Inc. v. Kinkos Graphics Corp. , 758 F. Supp. 1522(S.D.N.Y. 1991)............................................................................................. 29-31
Buck v. Jewell-La Salle Realty Co. , 283 U.S. 191 (1931) .......................... 25, 31, 43
Capitol Records, Inc. v. Naxos of Am., Inc. , 372 F.3d 471(2d Cir. 2004).......................................................................................................45
City of Los Angeles v. Preferred Commcns, Inc. , 476 U.S. 488 (1986).................40
CoStar Group, Inc. v. LoopNet, Inc. , 373 F.3d 544(4th Cir. 2004)...............................................................................35-39, 41, 52-53
Eastern Microwave, Inc. v. Doubleday Sports, Inc. , 691 F.2d 125(2d Cir. 1982), cert. denied , 459 U.S. 1226 (1983).............................................40
Elektra Records Co. v. Gem Elec. Distribs., Inc. , 360 F. Supp. 821(E.D.N.Y. 1973)...................................................................................................30
FCC v. Midwest Video Corp. , 440 U.S. 689 (1979) ................................................40
Infinity Broadcast Corp. v. Kirkwood , 150 F.3d 104 (2d Cir. 1998) ............... 23, 30
Knickerbocker Toy Co. v. Azrak-Hamway Intl, Inc. , 668 F.2d 699(2d Cir. 1982)................................................................................................. 54-55
MAI Sys. Corp. v. Peak Computer, Inc. , 991 F.2d 511 (9th Cir. 1993),cert. dismissed , 510 U.S. 1033 (1994).................................................................49
Marobie-FL, Inc. v. Natl Assn of Fire Equip. Distribs. ,983 F. Supp. 1167 (N.D. Ill. 1997)......................................................................52
Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd. , 545 U.S. 913(2005)...................................................................................................................44
Microsoft Corp. v. Harmony Computers & Elecs., Inc. ,846 F. Supp. 208 (E.D.N.Y. 1994) ......................................................................25
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Table of Authorities
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iv
Midway Mfg. Co. v. Artic Intl, Inc. , 547 F. Supp. 999
(N.D. Ill. 1982), affd , 704 F.2d 1009 (7th Cir.), cert. denied ,464 U.S. 823 (1983).............................................................................................52
Morris v. Bus. Concepts, Inc. , 283 F.3d 502 (2d Cir. 2002) ...................................51
New York Times Co. v. Tasini , 533 U.S. 483 (2001)........................................ 33, 44
OMara v. Town of Wappinger , 485 F.3d 693 (2d Cir. 2007)........................... 24-25
Paramount Pictures Corp. v. Carol Publg Group , 11 F. Supp. 2d 329(S.D.N.Y. 1998), affd mem. , 181 F.3d 83 (2d Cir. 1999) ..................................45
Playboy Enterprises, Inc. v. Russ Hardenburgh, Inc. ,982 F. Supp. 503 (N.D. Ohio 1997) ............................................................. 38, 43
Playboy Enterprises, Inc. v. Webbworld, Inc. , 991 F. Supp. 543(N.D. Tex. 1997), affd mem. , 168 F.3d 486 (5th Cir. 1999) .................. 38-39, 41
Princeton Univ. Press v. Mich. Document Servs. Inc. , 99 F.3d 1381(6th Cir. 1996) (en banc), cert. denied , 520 U.S. 1156 (1997)...................... 29-30
RCA Records v. All-Fast Sys., Inc. , 594 F. Supp. 335 (S.D.N.Y. 1984) .................30
RCA/Ariola Intl, Inc. v. Thomas & Grayston Co. , 845 F.2d 773(8th Cir. 1988)................................................................................................ 29-30
Register.com, Inc. v. Verio, Inc. , 356 F.3d 393 (2d Cir. 2004) ...............................31
Religious Tech. Ctr. v. Netcom On-Line Commcn Servs., Inc. ,907 F. Supp. 1361 (N.D. Cal. 1995)............................................................ passim
Rogers v. Koons , 960 F.2d 301 (2d Cir. 1992) ........................................................25
Sandoval v. New Line Cinema Corp. , 147 F.3d 215 (2d Cir. 1998).................. 54-55
Skidmore v. Swift & Co. , 323 U.S. 134 (1944).................................................. 50-51
Sony Corp. of Am. v. Universal City Studios, Inc. , 464 U.S. 417(1984)........................................................................................................... passim
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Table of Authorities
Page
v
Stenograph L.L.C. v. Bossard Assocs., Inc. , 144 F.3d 96
(D.C. Cir. 1998) ...................................................................................................49Triad Sys. Corp. v. Se. Express Co. , 64 F.3d 1330 (9th Cir. 1995),
cert. denied , 516 U.S. 1145 (1996)......................................................................49
Turner Broadcasting Sys., Inc. v. FCC , 512 U.S. 622 (1994).................................40
Union Pac. R.R. v. Anderson , 120 P.2d 578 (Or. 1941) ..........................................46
United States v. Mead Corp. , 533 U.S. 218 (2001)........................................... 50-51
United States v. State Bank of N.C. , 31 U.S. (6 Pet.) 29 (1832)..............................46
Statutes
17 U.S.C. 101 ......................................................................................49-50, 52, 55
17 U.S.C. 106................................................................................................ passim
17 U.S.C. 108........................................................................................................30
17 U.S.C. 111........................................................................................................40
17 U.S.C. 512............................................................................................ 30, 36-37
47 U.S.C. 534........................................................................................................39
47 U.S.C. 535........................................................................................................39
Legislative Materials
H.R. Rep. No. 105-551 (1998).................................................................................36
H.R. Rep. No. 94-1476 (1976), as reprinted in 1976 U.S.C.C.A.N. 5659 .............................................................................. 52, 55
S. Rep. No. 105-190 (1998) .....................................................................................36
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Table of Authorities
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vi
Other
Alan Breznick, Time Warner Expands Start Over , Cable DigitalNews, Nov. 27, 2006 ...........................................................................................33
Kevin J. Delaney & Ethan Smith, YouTube Model Is CompromiseOver Copyrights , Wall St. J., Sept. 19, 2006, at B1 ...................................... 35-36
Steve Donohue, Intellectual Property Portfolio Backs Time Warner Networked DVR Startup , Multichannel News, Oct. 20, 2003, at 3 .....................33
Ethan Smith, MySpace Deploys System to Guard Copyrighted Works ,
Wall St. J., Oct. 31, 2006, at B2 ..........................................................................36
U.S. Copyright Office, DMCA Section 104 Report (Aug. 2001) ...................... 50-52
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vii
Citation Conventions
The following abbreviations are used throughout this brief:
SPA for references to the Special Appendix.
A for references to the Joint Appendix.
CA for references to the Confidential Joint Appendix.
CV Br. for references to the Brief and Special Appendix for De-fendants-Counterclaimants-Appellants.
CDT Br. for references to the Brief of Amici Curiae Center forDemocracy & Technology, Electronic Frontier Foundation, et al.in Support of Appellants Urging Reversal.
Profs. Br. for references to the Brief of Amici Curiae Law Pro-fessors in Support of Defendants-Counterclaimants-Appellants andReversal.
Wu Br. for references to the Brief of Amicus Curiae ProfessorTimothy Wu in Support of Reversal.
Fox Br. for references to the Brief and Statutory Appendix of Plaintiffs-Counter-Defendants-Appellees Twentieth Century FoxFilm Corporation, et al.
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Preliminary Statement
This case is not about when consumers have the right to record televi-
sion programs for later viewing. Nor is it about the future of home-recording
technology. It has nothing to do with the Sony case, or with the Internet. This case
is about a for-profit copying and transmission service for television programming
that Cablevision proposes to launch, and whether Cablevision is required to obtain
licenses from copyright holders to make reproductions and transmissions of
copyrighted programming as part of the service.
The licensing rules for Cablevisions proposed service are straight-
forward. Cablevision already enters into licensing agreements that specifically
govern its uses of copyrighted programming. It is undisputed that Cablevision
does not have a license to include plaintiffs copyrighted programming in its
proposed copying and transmission service. But Cablevision has refused to
negotiate such a license.
In its opening brief, Cablevision suggests that this Court depart from
traditional copyright-law principles and long-established case law, and adopt a rule
of law with far-reaching implications for technologies in various fields not before
this Court and, indeed, for technologies not yet developed. Cablevision asks the
Court to create a rule that excuses any business from liability as a direct infringer
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2
if, at the request of its customers, it uses machines or robots to make what would
otherwise be directly infringing reproductions and transmissions, on the ground
thatat least superficiallythere is no human intervention on the part of the
business in the physical acts of making particular reproductions and transmissions.
Cablevisions proposed revision of copyright law is inconsistent with
sensible, practical application of copyright principles, and would lead to an
illogical result in this case. Here, the undisputed material facts show that Cable-
vision makes the copies and transmissions in the RS-DVR Service. On its own
initiative that is, not in response to any subscriber requestCablevision supplies
Turners copyrighted content (which it has licensed from Turner for limited
purposes that do not include the RS-DVR Service), reconfigures that content, and
copies that content onto computer equipment located at a Cablevision facility.
Then, at subscribers request, Cablevision copies that content yet again, stores it
indefinitely at a Cablevision facility, and transmits it to subscribers over Cable-
visions cable system for on demand viewing. Cablevision has a pervasive and
systematic role in the copying and transmission service, and Cablevisions own
conduct exhibits the volition necessary to subject Cablevision to liability as a direct
infringer.
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4
multiple subscribers for on demand viewing as part of a service for commer-
cial gain.
Statement of the Case
In March 2006, Cablevision announced that it would conduct a tech-
nical trial of the RS-DVR Service, and then offer the RS-DVR Service to all of its
subscribers. Shortly before Cablevisions announced start of the technical trial, on
May 26, 2006, The Cartoon Network and CNN filed a complaint in this action
(No. 06 CV 4092). (A25-39.) On June 7, 2006, the parties agreed to coordinate,
for discovery purposes, with a similar action brought against Cablevision by
several major movie studios and broadcast networks (No. 06 CV 3990). (A57.) At
that time, Cablevision stipulated that (1) it will not be asserting a fair use
defense against claims for direct infringement; 1 and (2) it would not launch the
RS-DVR Service pending resolution by the Court of the question of liability in
this action. ( Id. )
The District Court held a two-day trial on October 31 and Novem-
ber 1, 2006. By consent of the parties, the District Court considered both the
arguments on the parties cross-motions for summary judgment and the testimony
1 Cablevisions suggestion that [t]he parties limited the issues, stipulatingthat plaintiffs would assert only direct infringementnot contributory infringe-ment (CV Br. 6) is wrong. Plaintiffs had already filed their respective complaintsasserting only claims of direct infringement. (A25-39, A1339-48.)
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from expert witnesses at the hearing. (A953.) The parties agreed that the Court
will be able to assess credibility and to make findings as to the expert testimony
presented. ( Id ., A1214, SPA18-19.) At the trial, Turner presented testimony
from Ted Hartson, an expert in cable television technology. (A1079-80, A821-24,
A1331-34.)
On March 22, 2007, the District Court issued a 37-page opinion grant-
ing plaintiffs motions for summary judgment. After carefully analyzing the
RS-DVR Service on its particular facts (SPA4-18), the District Court found that
the RS-DVR is not a stand-alone machine that sits on top of a televi-sion. Rather, it is a complex system that involves an ongoingrelationship between Cablevision and its customers, payment of monthly fees by the customers to Cablevision, ownership of theequipment remaining with Cablevision, the use of numerous com-puters and other equipment located in Cablevisions private facilities,and the ongoing maintenance of the system by Cablevision person-nel. (SPA2-3.)
Based on the undisputed facts and on factual findings as to the expert testimony,
the District Court concluded that Cablevision, and not just its customers, would
be engaging in unauthorized reproductions and transmissions of plaintiffs
copyrighted programs. (SPA2.) Accordingly, the District Court permanently
enjoined Cablevision from (1) copying plaintiffs copyrighted works and
(2) engaging in public performances of plaintiffs copyrighted works, unless it
obtains licenses to do so. (SPA36-37.)
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Statement of Facts
The Parties
Turner Broadcasting System, Inc. (TBS) and certain of its subsidiar-
ies (collectively Turner) produce, create, license and promote some of the most
popular and well-known television programming in the United States. Plaintiff
Cable News Network LP, LLLP (CNN) owns the copyrights to numerous
programs aired on the CNN family of networks (CNN, Headline News, CNN en
Espaol and CNN International), including Larry King Live , Anderson Cooper
360 and Lou Dobbs Tonight . (CA37, CA39, A26, A29-30.) Plaintiff The Cartoon
Network LP, LLLP (The Cartoon Network) owns the copyrights to numerous
programs aired on the network of the same name, including popular animated
programming for children and adults such as Codename: Kids Next Door , Camp
Lazlo and Aqua Teen Hunger Force . (CA37, CA39, A29.) CNN and The Cartoon
Network have applied for and obtained copyright registrations for these programs.
(CA39.) 2
Turners programming is one of its core assets. Turners business is
centered on exploiting the value of that programming in all media. (CA39-41.)
2 As set forth in greater detail in the Corporate Disclosure Statement, CNN isnow known as Cable News Network, Inc. and The Cartoon Network is now knownas The Cartoon Network, Inc. Other Turner entities were brought into thislitigation as third-party defendants.
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Turner licenses its programming for transmission as linear networks i.e. ,
traditional television in which programs are aired in sequence at set times of day
by all major cable operators, including Cablevision, as well as by direct broadcast
satellite companies such as DirecTV and EchoStar. (CA39, A162-254, CA45,
A26-27, A61, CA176.) Turner separately licenses certain content for transmission
as video on demand (VOD) and for sale in packaged media, such as DVDs.
Turner is also on the forefront of using new technologies to distribute its copy-
righted programming, and has licensed content for the Internetfor example, by
licensing Apples iTunes to offer individual television programs for download
and on cell phones. (CA39-41, A255-90, CA360-434, CA168.)
Cablevision is a large cable operator with over three million subscrib-
ers in the New York City metropolitan area. With but a few exceptions,
Cablevision exercises editorial discretion about what networks it wishes to include
on its system. Cablevision enters into licensing agreements with content providers,
such as Turner, for the right to transmit television programming to Cablevisions
subscribers. (CA42, CA130-31.) Those licenses are typically conveyed in written
contracts, often called affiliation agreements. (CA42, CA128.) Cablevision has
entered into affiliation agreements with Turner granting Cablevision a license to
transmit certain Turner networks as linear networks, including the Cartoon
Network and CNN. (CA41-42, CA435-51, A68-69, A28-30, A62.)
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Cablevision concedes that its access and rights to programming on
Turner networks are narrowly defined and entirely a function of the affiliation
agreements. (CA42, CA128, CA131, CA1054.) In each case, those agreements
allow for transmission of each Turner networks programming signal only on a
single designated channel without any editing, delay, addition, alteration or
deletion. (CA43, CA436, CA445.) The agreements expressly prohibit Cablevi-
sion from recording or duplicating any element of a Turner network programming
signal for any purpose unless expressly authorized in writing by Turner. (CA43-
44, CA437, CA447.) It is undisputed that no provision of those affiliation
agreements, or any other contract, authorizes Cablevision to copy or transmit
programming as part of the RS-DVR Service. (CA45, CA138, CA144,
CA435-51.)
Cablevision has also contracted with a number of content providers
for the right to transmit programming as VOD. Cablevision concedes that in order
to transmit programming belonging to content providers on an on-demand basis, it
must have a license. (CA44, CA134-38, CA132.) The license agreements for
VOD that Cablevision has entered into include the essential terms of Cablevisions
rights to use the programming, including the specific programs licensed for VOD,
the duration of the license, Cablevisions content protection obligations and the
economic terms. (CA44, CA137.) Cablevision acknowledges that it has no license
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9
agreement with Turner for any form of on-demand viewing service. (CA45,
CA138, A63.)
Cablevisions Design and Operation of the RS-DVR Service
Cablevision proposes to offer to the public, for a fee, a service it calls
the RS-DVR. (CA48, A318, A71, CA49, A64, CA222-23.) Despite its name,
the RS-DVR Service is not a DVR. It is a commercial service in which
Cablevision would use a complex system of computer hardware and software
(1) to make unauthorized copies of copyrighted programs and store those copies at
a central Cablevision facility (called the head-end), and (2) to transmit the stored
programs to subscribers on demand over Cablevisions cable system. (CA51-57.)
Cablevision concedes that it hopes to profit from the Service and enhance its
competitive position in relation to satellite distributors. (CA49, CA205-07.)
Cablevision designed and built the RS-DVR Service. (CA49, CA309,
CA316, CA506, A1205.) Unlike a set-top DVR box, which operates within a
users home, the RS-DVR Service depends on hardware and software located at
Cablevisions head-end facility. (CA50, CA111-13.) Cablevision has purchased
the hardware for the Service, and owns or licenses the necessary software, some of
which was written at Cablevisions request specifically for the Service. (CA50,
CA110-11, CA514, CA542, A590-91.) No subscriber or content provider has
played any role in the conception, creation or design of the RS-DVR Service.
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In its internal documents, Cablevision repeatedly refers to the
RS-DVR as a service. (CA707, A668, CA815, A609, A612-13, A615, A675.)
This characterization is unsurprising given Cablevisions ongoing role in gather-
ing, reconfiguring, storing and transmitting content for the RS-DVR Service.
Cablevision-employed system administrators will manage the Service from a
central facility, staffed 24 hours a day, seven days a week. (SPA10, CA707,
CA732-34, CA750, A1205-06.) Cablevision facilities will host the massive
amounts of equipment (running numerous software programs) on which the copies
of copyrighted programming will be made and stored and from which they will be
transmitted. (SPA10, CA51, CA707, A1100-01.) As Judge Chin found below
(SPA10), a Cablevision RS-DVR subscriber would not be able to walk into
Cablevisions facilities and touch the RS-DVR system. (A1206.)
Cablevision would operate, maintain and market the RS-DVR Serv-
ice. (CA49-51.) Cablevision would offer the Service to its cable subscribers for
an additional monthly fee. (CA49-51, CA222-23.) Nothing in the record suggests
that Cablevision would or could sell its RS-DVR to retailers as an independent,
stand-alone box (as, for example, VCRs are sold) or would ever be able to install
an RS-DVR system entirely within a subscribers home.
Cablevision controls the scope of the RS-DVR Service on an ongoing
basis. For example, Cablevision decides which channels will be included in the
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Service and has the technological ability to include or exclude channels. (SPA11,
CA49, CA708, A1084, A1093, A1207-09.) In its short life, the RS-DVR Service
has variously included either 50 channels or 170 channels, and in some planned
iterations, has excluded pay-per-view, music channels and high definition
channels. (CA49, CA708.) Similarly, Cablevision decides how much storage
capacity to allocate to each subscriber. It has settled variously on 80 gigabytes and
160 gigabytes, and some Cablevision documents refer to allowing subscribers to
make impulse purchases of additional storage. (SPA10, CA55, CA708, A1210-
12.) Cablevision also decides the number of programs that may be recorded at a
given time and whether recorded programs may be shared within a household ( i.e. ,
a home with cable service on multiple television sets) or will be limited to a
particular set-top box. (CA60, A810.) Cablevision thus determines the functional-
ity of the system and has the abilitywhich even before formal product launch it
has already demonstrated a willingness to exerciseto alter the operations and
functionality of the RS-DVR Service.
Cablevision also has the ability to monitor and override the requests
of RS-DVR Service subscribers. For example, Cablevision employees can monitor
which programs are scheduled for recording for a particular set-top box, which
programs are currently being copied for that box, which programs are available for
playback to that box, which programs are currently being transmitted to that box,
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and which programs a subscriber has viewed during a particular time period.
(CA710, A850-52.) And although Cablevision contends it will use such abilities
only for troubleshooting purposes (CV Br. 10), Cablevision employees have the
ability in the RS-DVR Service to delete the hard-drive copy of a program recorded
for an individual subscriber and to terminate the transmission of a program to an
individual subscriber. (CA709, CA792, CA806, CA930, A1101-02.)
How Cablevision Copies Programming in the RS-DVR Service
To explain how the reproduction and public performance violations
occur in this case, it is useful to present a brief technological overview of the
RS-DVR Service. 3 The components of the Service discussed below are presented
in the following network diagram, created by Cablevision for the technical trial
(A1325):
3 For an introduction to cable television technology, see the summary in theDistrict Courts opinion (SPA5-7) or the fuller description in Mr. Hartsons expertreport (A827-33).
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RS-DVR Service. To do so, Cablevision splits the linear network feed at its head-
end into two streams: transmitting one branch to its subscribers in real time, and
diverting the other into the system for the RS-DVR Service. (SPA11, CA51,
CA270, CA564-65.)
Once Cablevision creates this second programming stream for the
RS-DVR Service, Cablevision must reconfigure the stream to convert it into the
right format for copying. (CA51, CA315, CA558.) To do so, Cablevision sends
all the programming it intends to make available for recording in the RS-DVR
Service through a clamper, a piece of computer equipment made by BigBand
Networks, Inc. and called the Broadband Multimedia-Service Router (BMR).
(SPA11-12, CA52, A592, CA558, CA270-71.) The BMR clamper copies the
programming into its memory and by applying advanced computer algorithms
converts it into the format needed for copying in the RS-DVR Service. (CA1295,
CA52, A810.) The BMR clamper holds the programming in its random access
memory (RAM) in increments of roughly 1.2 seconds, long enough for the clamper
to analyze and reformat the programming data. (A810, CA1167, CA735, A1085.)
Cablevision then directs the clamped programming streams to the
central piece of equipment for the RS-DVR Service, a computer made by Arroyo
Video Solutions, Inc. and known as the Arroyo server. (SPA13, CA52-53,
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A592, CA110-11, CA274-75, CA272.) 4 Like the BMR clamper, the Arroyo server
is located at Cablevisions head-end facility. The Arroyo server copies each
programming stream into a portion of its memory known as a primary ingestion
buffer, and holds the programming there for up to a tenth of a second (which is
roughly three frames of video). (SPA13, CA53, CA101.) This is sufficient time
for the Arroyo server (if it receives an appropriate request) to make further copies
of the programming held in the buffer. (A1127-30, A1188-94.) Over time, the
entire content of every program on every channel is copied and held in the primary
ingestion buffer. (SPA30, A1127.)
Cablevision undertakes each of those steps as part of the RS-DVR
Service regardless whether any subscriber has requested Cablevision to copy a
program. (SPA13, SPA16, CA53, CA100, A1086, A1204-05.) It is undisputed
that Cablevisions affiliation agreements with Turner do not authorize Cable-
visions reformatting of the linear signal when used in conjunction with the
RS-DVR Service or the RAM copies that Cablevision makes for the RS-DVR
Service. (CA42-45.)
4 Each Arroyo server is designed to serve up to 96 RS-DVR Service sub-scribers. (CA104, A1050-51.) For a commercial implementation of the RS-DVRService, Cablevision plans to use many thousands of Arroyo servers. (CA708,CA959-60, CA745-46.)
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Only at the next stage of the process does the subscriber enter the pic-
ture. As subscribers to the RS-DVR Service request copies of programming
scheduled to air in the future, Cablevision stores that information in a large
database that keeps track of which subscribers (if any) have requested copies of
each scheduled program. (SPA15, A841-42.) 5 Shortly before the program starts
on the linear network feed, a computer made by Vitria Technology, Inc. and
known as the Vitria server communicates the requests to the Arroyo server.
(A843.) The Vitria server sends an aggregated record requesta unified list of
all the subscribers who have requested copies of a given program. (SPA15, A843,
A1087-88.) Based on the information received from the Vitria server, the Arroyo
server locates in its primary ingestion buffer memory each frame of video for
which there is a record request, and makes multiple copies of that programming
into another portion of its memory, known as a secondary ingestion buffer, and
from there onto hard drives located within the Arroyo server at the head-end.
(SPA15-16, A843-44.) The programs stored on the Arroyo hard drives all derive
in their entirety from programming originally copied by Cablevision into the
primary ingestion buffer. (A1190-91.)
5 Alternatively, RS-DVR Service subscribers can request recording of a pro-gram already in progress. (SPA14.)
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Cablevision assigns each copy on the Arroyo hard drives to one of the
subscribers who requested a copy. (CA53-54, CA102, A550, CA109.) Each hard
drive contains stored programming assigned to multiple subscribers, with the data
for programming requested for one customer interspersed with data for program-
ming requested by another. (CA54-55, CA90, CA269, CA90.) The copies remain
on the hard drives indefinitely, until a subscriber requests that Cablevision delete a
program or until Cablevision overwrites it. (CA55-56, CA81, CA83, CA286-87,
CA617, A577.)
How Cablevision Transmits Programming in the RS-DVR Service
Cablevision transmits programming in the RS-DVR Service in essen-
tially the same way as it transmits VOD programming. It is therefore helpful to
take a brief detour into the technology behind VOD.
VOD programming is intended to be viewed at different times pursu-
ant to a subscribers requeston demand. (CA41, A30-31, A63.) Content
providers send VOD programming to cable operators not in real time (as with
linear programming), but on a periodic basis pursuant to agreed-upon licenses and
in an agreed-upon format different from that of linear programming. (CA46,
CA184-85.) Like other cable operators, Cablevision stores VOD programming as
digital files on hard drives at the head-end. (CA46, CA184-85.) When a sub-
scriber requests a VOD program, Cablevision locates that particular program on
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the hard drives and then transmits the VOD programming on a particular dedicated
bandwidth (or radio frequency) over its cable system, separate from the
bandwidth used to transmit linear networks. (CA47, CA177, CA472-73.) Because
bandwidth is limited, only a given number of subscribers in a node (a geographi-
cal service area of a cluster of homes) can view VOD programming at any one
time. (CA47, CA345.) If too many subscribers within a node request VOD
programming at the same time, some will receive an error or please try again
message. (CA47, CA345.)
The process by which the RS-DVR Service transmits programming is
essentially identical. When an RS-DVR Service subscriber requests that Cable-
vision play back stored programming, Cablevision software locates the particular
program on the hard drives at its head-end, as with VOD, and then transmits the
program over the cable system from the head-end to subscribers homes through a
VOD platform using a particular bandwidth dedicated to the RS-DVR Service.
(SPA17, CA56, A592, CA559-60, CA273, A317, CA306, CA275-76, CA267,
CA359, A551.) As with VOD, because the amount of bandwidth for a given node
is fixed, if too many subscribers in the node request RS-DVR Service transmission
at the same time, Cablevision will not be able to fulfill all requests. (SPA18,
CA57, CA345, CA347, A1099-100.) Because Cablevision retains a copy of the
stored program on the hard drive, Cablevision can transmit RS-DVR Service
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programming to its subscribers, as with VOD, an indefinite number of times.
(CA57.)
The only significant differences between VOD and the RS-DVR Serv-
ice are that the RS-DVR Service is unlicensed, and content providers, such as
Turner, have lost control over their programming. Indeed, as the District Court
found, in its architecture and delivery method, the RS-DVR bears striking
resemblance to VODa service that Cablevision provides pursuant to licenses
negotiated with programming owners. (SPA26-27.)
Although Cablevision now tries to deny that the RS-DVR Service is a
form of VOD, Cablevisions COO, Tom Rutledge, publicly described the RS-DVR
Service that is the subject of this lawsuit as based on a VOD platform [that] lends
itself to a variety of uses. (CA57, A595; see also CA58, CA506, CA600,
CA616.) The Arroyo server itself is a commercially available video on demand
server, which Arroyo modified, at Cablevisions direction, for use in the RS-DVR
Service. (SPA26, A1102.) Tellingly, in numerous instances Cablevisions own
internal engineering specifications for the RS-DVR Service originally referred to
VOD architecture and the VOD networkuntil, in preparation for this
lawsuit, Cablevision revised the specifications to replace VOD with RS-DVR.
(CA57-58, CA626-27, CA556-57, CA352-53.)
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Fundamental Differences Between the RS-DVR Service and a Set-Top DVR Box
In an obvious effort to distance the RS-DVR Service from its close
genealogical roots in VOD, Cablevision has deliberately designed the RS-DVR
Service so that the subscriber experience in using the Service mimics the look
and feel of an in-home set-top DVR box. (CA59, CA326, A314, CA648.) Thus,
Cablevision has taken pains to assign purportedly analogous functions to the same
buttons on the remote control, and to present the subscriber with a similar on-
screen menu. (CA59, A582, CA208.)
The similar functionality is only skin-deep. 6 As the District Court
found, under the hood the RS-DVR Service is nothing like a DVR. (SPA25-26,
A856-59, A1106-10, A1329-30.) Although Cablevision labors to describe the
internal mechanics of a set-top DVR box as complex (CV Br. 5), the simple fact
is thatunlike the RS-DVR Servicea set-top DVR box is under the users direct
control. All of its functions take place inside the home, in direct response to a user
command. (CA48, CA189, A314, CA345-46, A857, A859, A1106-07.) By
contrast, with the RS-DVR Service, the critical functions take place at Cable-
6 Cablevision has artificially limited the functionality of its current version
of the RS-DVR Service so that it appears to mimic that of a set-top DVR box.(CA60-61, A847-50.) These limitations are unrelated to the technologicalcapabilities of the RS-DVR Service, and Cablevision could remove them at anytime. (CA60, CA495, CA326, A578, A847-49.)
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visions head-end facility. Some of the RS-DVR Service functions occur without
any subscriber request whatsoever, and the remainder are mediated by a network of
hardware and software under Cablevisions control that determines whether the
Service fulfills the request. (SPA25-26.) 7 The RS-DVR Service involves creating
separate streams of programming at the head-end and transmitting them to
subscribers over the cable system. (SPA17.) None of that occurs with a set-top
DVR box.
Cablevision Refuses to Negotiate a License for the RS-DVR Service
When originally contemplating a network-based alternative to the
in-home DVR experience, Cablevision understood that such a service would
require licenses from content providers. In an interview in 2004, Cablevisions
head of programming, Mac Budill, stated: With support from our programming
partners , we think that we can offer a [network-based] service to our customers
that . . . [is] complementary to the interests of copyright holders and program-
mers. (CA61, A601 (emphasis added).)
7 A cable operator does not have this kind of control over a set-top DVRbox. Although a cable operator can remotely disable a set-top box from function-ing altogether (CV Br. 6), a cable operator cannot remotely prevent a subscriberfrom playing back a particular recording stored on the hard drive located withinthat subscribers set-top DVR box. (A857.)
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Sometime thereafter, Cablevision apparently changed its mind about
the need for a license for a network-based service. On March 21, 2006, Cable-
vision sent letters to 89 content providers informing them of Cablevisions
intended trial and launch of the RS-DVR Service. (CA62, A318-495, CA143-44.)
Notably, not a single content provider responded by authorizing inclusion of its
programming in the Service. (CA62, CA144, A603, A62.) Turner proposed to
enter into licensing discussions for the Service, but Cablevision refused. (CA62,
CA148-49, A603, A62.)
Summary of Argument
The undisputed facts are that Cablevision designed the RS-DVR Serv-
ice, chooses which television programming to make available for copying and
supplies that content to the Service, reconfigures the format of that content for
copying, makes preliminary copies independent of any individual subscriber
request, stores copied content on its servers, hosts and maintains the thousands of
pieces of necessary equipment for the Service in multiple facilities that it owns and
operates, uses its employees as system administrators, and transmits the content
over its cable lines. Cablevision would charge its subscribers a monthly fee for
those services. Cablevision does all of that without obtaining any licenses for the
RS-DVR Service from content providers such as Turner.
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On these factsnone of which Cablevision contests in this appeal
Cablevision itself makes the copies and transmissions in the RS-DVR Service.
These facts render Cablevision liable for direct infringement of plaintiffs rights of
reproduction and public performance. Cablevision engages in directly infringing
acts even without receiving any subscriber request, but under well-established
copyright law, Cablevision is equally liable for making unauthorized copies and
transmissions at its subscribers request. In Infinity Broadcast Corp. v. Kirkwood ,
150 F.3d 104 (2d Cir. 1998), and other cases, this Court and others have held
businesses directly liable for engaging in infringing acts on customer request, even
if the customers themselves might have had a fair use defense. These cases
require affirmance of the judgment here against Cablevision.
Cablevision seeks to be excused from liability because it claims to
have designed and built its Service in such a way that its role in the physical acts of
copying and transmitting copyrighted content is automated. But Cablevisions
automation defense is not supported by Religious Technology Center v. Netcom
On-Line Communication Services, Inc. , 907 F. Supp. 1361 (N.D. Cal. 1995), on
which Cablevision relies, or by any other precedent. The notion that one can
deliberately automate a service so as to preclude application of copyright protec-
tions is likewise unsupported. Accepting Cablevisions purported excuse would
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amount to a judicial rewriting of the copyright laws, which the District Court
properly rejected. Instead, the District Court decided this case, rightly, on its facts.
Similarly, Cablevisions other leading case, Sony Corp. of America v.
Universal City Studios, Inc. , 464 U.S. 417 (1984), is wholly inapposite here. Sony
addressed (1) the fair use defense available to a television viewer who time-
shifts viewing of television programming and (2) whether a VCR manufacturer
could be held liable for contributory infringement for the act of selling the VCR.
Here, there is neither a contributory infringement claim (A25-39, A1339), nor is
there any fair use issue because Cablevision expressly waived any fair use
defense to direct infringement (A57). So Cablevisions reliance on Sony is a
needless sideshow.
Standard of Review
The District Court reached its legal conclusions based on a careful ex-
amination of the facts regarding Cablevisions proposed RS-DVR Service. Some
of those facts were undisputed; others were factual findings that the District Court
was permitted to make, based on the expert testimony at the trial, and under the
terms of the parties stipulation to that effect. (A953.) The District Courts
findings of fact are thus entitled to deference and reviewed only for clear error.
OMara v. Town of Wappinger , 485 F.3d 693, 697 (2d Cir. 2007). Notably,
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Cablevision does not challenge a single finding of fact by the District Court. The
District Courts conclusions of law are reviewed de novo. Id.
Argument
To establish a prima facie claim of direct copyright infringement,
Turner must demonstrate (i) ownership of, or exclusive licenses to, copyrighted
works, and (ii) unauthorized copying. Rogers v. Koons , 960 F.2d 301, 306 (2d
Cir. 1992). Copying in this instance is shorthand for the infringing use of any
of the copyright owners five exclusive rights, described at 17 U.S.C. 106.
Microsoft Corp. v. Harmony Computers & Elecs., Inc. , 846 F. Supp. 208, 210
(E.D.N.Y. 1994) (citation omitted). It is well established that copyright infringe-
ment is a strict-liability offense. Intention to infringe is not essential under the
[Copyright] [A]ct. Buck v. Jewell-La Salle Realty Co. , 283 U.S. 191, 198 (1931).
The first element of copyright infringementTurners ownership of,
or exclusive licenses to, copyrighted programmingis undisputed. (CA39,
CA1046.) With regard to the second elementunauthorized copyingit is
undisputed that Cablevision does not have authorization from Turner to copy any
Turner programming. The only question is whether Cablevision would, in fact,
copy Turners programming as part of the RS-DVR Service. The copying at
issue in this case relates to two of the exclusive rights conferred on Turner by the
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Third , Cablevision would violate Turners exclusive right of public
performance by making unauthorized transmissions of copyrighted television
programming to multiple subscribers for on demand viewing. ( See Fox Br.)
I. CABLEVISION MAKES UNAUTHORIZED COPIES OF TURNERSCOPYRIGHTED PROGRAMMING AND STORES THEM INDEFI-NITELY.
In operating the RS-DVR Service, Cablevision uses its computer
equipment to make complete copies of television programs and to store those
copies indefinitely at a central Cablevision facility. (SPA22-29.) That is a direct
violation of plaintiffs reproduction right. Cablevision argues that it should escape
liability because it claims it makes those copies at its subscribers request. But
well-established copyright law teaches that businesses, such as copy shops, are
liable as direct infringers even if they make copies at the request of their custom-
ers. Here, the facts are plain that Cablevision exercises even greater control over
the copying process than a copy shop doesincluding taking affirmative steps to
begin the copying process even before receiving any subscriber requests.
Accordingly, the role of subscribers in making requests cannot excuse Cablevision
from liability as a direct infringer.
A. Cablevision Is Directly Liable for the Unauthorized Copies that ItMakes at the Request of Its Subscribers.
Based on its careful analysis of the expert testimony and the undis-
puted material facts, the District Court made a finding of fact that Cablevision
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plays a continuing and active role in making the copies (and transmissions) in
the RS-DVR Service. (SPA22.) In particular, the District Court found that
Cablevision would (1) decide which programming channels to make available for
recording and provide that content (SPA24), (2) reconfigure the linear channel
programming signals received at its head-end (SPA26), (3) house, operate, and
maintain . . . the equipment that makes the RS-DVRs recording process possible
(SPA24), (4) have physical control of the equipment at its head-end (SPA24-25),
(5) have personnel monitor the programming streams at the head-end and ensure
that the servers are working properly (SPA25), and (6) determine[] how much
memory to allot to each customer and reserve[] storage capacity for each on a hard
drive at its facility (SPA25). Cablevision has contested none of those factual
findings on this appeal. Thus, the District Court correctly concluded that, on these
facts, Cablevision would be doing the copying, notwithstanding that the copying
would be done at the customers behest. (SPA27.)
Courts have consistently rejected schemes to avoid liability for in-
fringement by disguising copying as a customer request. Courts hold that
businesses that, like Cablevision, fulfill customer requests for unauthorized copies
are liable as direct infringerswhether or not their customers may be able to assert
a fair use defense. For example, copy shops such as Kinkos are directly liable for
making infringing copies, even if those copies are made at the request of professors
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or students. See Princeton Univ. Press v. Mich. Document Servs. Inc. , 99 F.3d
1381, 1385-91 (6th Cir. 1996) (en banc), cert. denied , 520 U.S. 1156 (1997); Basic
Books, Inc. v. Kinkos Graphics Corp. , 758 F. Supp. 1522, 1530-35 (S.D.N.Y.
1991).
In both Princeton University Press and Basic Books , a defendant copy
shop ran a duplicating service for university professors whereby a professor could
supply the copy shop with copyrighted materials that he or she wanted to include
in a coursepack, and then the copy shop would handle the physical copying of
those materials and sell the coursepack to the professors students. Princeton
Univ. Press , 99 F.3d at 1384; Basic Books , 758 F. Supp. at 1528-29. In each case,
the court rejected the suggestion that, because the copy shop was making copies at
the direction of its customers, those customers, not the copy shop, were responsible
for the copies. Princeton Univ. Press , 99 F.3d at 1386 n.2, 1389; Basic Books , 758
F. Supp. at 1532, 1545-46. Notably, the courts held that the copy shops were liable
as direct infringers, even though their customers might not have been subject to
liability because the customers might have had a fair use defense. Princeton
Univ. Press , 99 F.3d at 1389, Basic Books , 758 F. Supp. at 1532.
Courts have reached the same result in cases involving businesses that
use in-store equipment to copy copyrighted sound recordings onto blank audio
tapes at the request of customers. RCA/Ariola Intl, Inc. v. Thomas & Grayston
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Co. , 845 F.2d 773, 781 (8th Cir. 1988); RCA Records v. All-Fast Sys., Inc. , 594 F.
Supp. 335, 337-38 (S.D.N.Y. 1984); Elektra Records Co. v. Gem Elec. Distribs.,
Inc. , 360 F. Supp. 821, 823 (E.D.N.Y. 1973).
This Court has endorsed the reasoning of the copy shop cases. In In-
finity Broadcast Corp. v. Kirkwood , 150 F.3d 104 (2d Cir. 1998), a case involving
a public performance made at customer request, the Court cited Princeton
University Press and Basic Books with approval for the proposition that courts
have rejected attempts by for-profit users to stand in the shoes of their customers.
Id. at 112. The Infinity Broadcast Court therefore concluded that large-scale
photocopying, even for the statutorily-approved purpose of educational use, can
still infringe. Id. In the same way, Cablevisions large-scale copying of
television programming infringesnotwithstanding that Cablevisions subscribers
request copies and even if its subscribers might qualify for a fair use defense (a
defense that Cablevision itself has waived). 8
8 Notably, Congress has already provided limited exceptions from the copy-right laws that permit businesses to make, at the request of their customers, whatwould otherwise be infringing copies of copyrighted works. See, e.g. , 17 U.S.C. 108 (exception for user-initiated copies of works made by libraries or archives);17 U.S.C. 512 (limiting liability of service provider[s] for money damages inconnection with certain user-initiated actions). Tellingly, the copying contem-plated by the RS-DVR Service does not fit within any of these exceptions.
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Indeed, Cablevision is even more actively involved in the copying in
the RS-DVR Service than a copy shop such as Kinkos is in preparing
coursepacks. Unlike Kinkos, Cablevision selects the content for copying and
provides that content to its subscribers. (SPA24.) Moreover, up front, before any
subscriber is involved, Cablevision processes all of the content and reconfigures it
so that it can be copied. (SPA26.) Kinkos does none of that. Cablevisions active
involvement throughout the copying process makes the RS-DVR Service an even
clearer case of direct infringement.
Nor can Cablevision escape liability by pointing to the fact that, in the
copy shop cases, defendants employees themselves did the copying. (CV
Br. 23.) There is no relevant distinction between a business that uses employees to
make copies and one that uses machines. Thus, in rejecting Kinkos argument that
it acted merely as an agent of its customers, the Basic Books court pointed not to
the role of Kinkos employees in the physical act of making particular copies, but
instead to Kinkos control over the copying service. 758 F. Supp. at 1546.
Likewise, in other legal contexts, a defendant is liable for the acts of machines it
owns and programs. See, e.g. , Register.com, Inc. v. Verio, Inc. , 356 F.3d 393, 404
(2d Cir. 2004) (affirming preliminary injunction against trespass to chattels
through use of search robots). That should hold even more true in copyright law,
where direct infringement is a strict-liability offense. Buck , 283 U.S. at 198.
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There is no robot exception to copyright infringement. In our in-
creasingly automated world, it would defy common sense if Cablevision could
make an end-run around the copyright laws simply by automating the physical act
of making a particular copy. There is no legal distinction between copying a
manuscript longhand or with a photocopying machine. Returning to the copy shop
fact patternwith modifications to resemble the RS-DVR Serviceunderscores
that point. Suppose Kinkos were to design and implement a service that takes
copyrighted books and, without permission from the copyright holders, allows
customers to make automated requests (either in-store or remotely) for print copies
of those books. Machines at the Kinkos store were programmed by Kinkos to
coordinate the requests, make the requested copies, and print them out in-store or
transmit them to the customers personal computer for home readingall without
any human intervention. That a Kinkos employee would not actually press the
buttons that would cause the service to make the copies, however, surely would not
change the fact that Kinkos itself would be making the unauthorized copies and
would be liable for direct infringement, just as Cablevision is here. 9
9 Morevover, the record here shows not only that Cablevisions employeesdesigned and built the RS-DVR Service, but also that Cablevisions systemadministrators continuously operate and maintain the RS-DVR Servicefromfacilities staffed 24 hours a day, seven days a week (SPA10, CA707, CA732-34,CA750, A1205-06)and would be able to monitor and override the actions of
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Cablevisions RS-DVR Service. Start Over includes only those channels for which
Time Warner Cable has obtained a separate Start Over license. Where Start Over
has been introduced, the service includes, by license, over one hundred of the
linear channels on the cable system.
Accordingly, Start Over also demonstrates, contrary to the unsup-
ported assertions of Cablevisions amici (CDT Br. 21-26; Wu Br. 12-19), that
affirmance of the judgment below would not stifle development of a new technol-
ogy. Nor would it unduly favor device DVRs over network DVRs. Rather,
affirmance of the judgment here would simply enforce the fundamental copyright-
law principle that users of copyrighted content must obtain a license.
B. Cablevisions Reliance on Netcom Is Misplaced.
Cablevision claims that volition or human intervention to make a
particular copy is a prerequisite for liability as a direct infringer. (CV Br. 14.)
But Cablevision points to no support for such a requirement under the Copyright
Act itself or in the Acts legislative history. And Cablevision does not cite to a
single case from this Circuit in support of such a requirement. Instead, Cablevision
looks to Netcom , a 1995 district court case from outside this Circuit. The Netcom
line of cases, however, does not support Cablevisions argument. The District
Court properly held that Cablevisions reliance on Netcom and its progeny was
misplaced. (SPA29.)
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Netcom and its progeny are all expressly based on the unique factual
circumstances and policy considerations raised by the Internet, and have been
applied only in that context. On the Internet, content flows freely from innumer-
able sources. By contrast, in the closed environment of a cable television system,
the cable operator controls the flow of content through the system. As the District
Court explained, Cablevision is not confronted with the free flow of information
that takes place on the Internet, which makes it difficult for ISPs to control the
content that they carry. (SPA28.)
Netcom and the cases following it are predicated on the inability of
Internet service providers (ISPs)typically, providers of connectivity to the
Internet and website operatorsto manage the free flow of massive amounts of
digital information that may traverse their facilities. See, e.g. , Netcom , 907
F. Supp. at 1372-73; CoStar Group, Inc. v. LoopNet, Inc. , 373 F.3d 544, 548 (4th
Cir. 2004). In light of technological developments since Netcom was decided in
1995when the Internet and the World Wide Web were in their infanciesthat
basic premise probably no longer holds today. 12 But that does not matter here
12 It is increasingly technologically possible for Internet access providers andwebsite operators to manage the data passing over their facilities or hosted bythem, including the ever-improving ability to separate infringing from non-infringing information in a reliable way. See, e.g. , Kevin J. Delaney & EthanSmith, YouTube Model Is Compromise Over Copyrights , Wall St. J., Sept. 19,2006, at B1 (discussing fingerprinting process that would allow website
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because there is no precedent or basis for applying Netcom to a closed architecture
like cable television. 13
Indeed, the Digital Millennium Copyright Act of 1998 (DMCA) re-
inforces the uniqueness of the copyright concerns in the Internet context. Congress
enacted Title II of the DMCA (codified at 17 U.S.C. 512) specifically in response
to Netcom and other Internet cases to deal with issues raised by the passive roles of
certain ISPs. See H.R. Rep. No. 105-551, pt. 1, at 24 (1998); S. Rep. No. 105-190,
at 19 & n.20 (1998). Congress limited the DMCAs protections to service
provider[s], as defined in 17 U.S.C. 512(k), and deliberately excluded cable
operatorswhen providing a television programming service and not acting
themselves as ISPs ( e.g. , providing high-speed Internet access)from the
protections of the DMCA. See H.R. Rep. No. 105-551, pt. 2, at 63-64 (1998); S.
Rep. No. 105-190, at 54-55 (1998). Cablevision did not contend below, nor does it
operators to screen automatically for copyrighted material in user-submittedcontent on the Internet); Ethan Smith, MySpace Deploys System to Guard Copyrighted Works , Wall St. J., Oct. 31, 2006, at B2 (describing a similarfiltering system).
13 Although Cablevision relies on the Fourth Circuits CoStar decision to ar-gue that Netcom applies beyond the Internet (CV Br. 30), the Fourth Circuit in factreferred to Netcom s construction of copyright infringement liability for ISPs,and was careful to limit its own holding precisely to ISPs. CoStar , 373 F.3d at555.
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contend here on appeal, that its actions in providing the RS-DVR Service fall
within any of the safe harbors of DMCA Section 512.
Further, Cablevision mischaracterizes Netcom s central proposition.
Netcom and its progeny stand for the proposition that when an ISP serves as
nothing more than a passive conduit, it is not liable as a direct infringer. Cable-
vision repeatedly asserts that those cases hold that volition or human
intervention to make a particular copy is a prerequisite for direct-infringer
liability. (CV Br. 14, 19, 20, 24.) But the cases say nothing of the sort. Netcom
holds that direct infringement requires some element of volition or causation.
907 F. Supp. at 1370. The cases following Netcom likewise articulate the test as
one of volition or causation. See, e.g. , CoStar , 373 F.3d at 550. Cablevision
cites no case that makes human intervention the test. 14 Nor does Cablevision cite
any case that goes so far as to require volition or causation in the act of making a
particular copy.
The Netcom cases demonstrate that the determinative aspect of the
volition or causation test is whether the defendant engaged in affirmative
conduct beyond being a passive conduit. In Netcom , for example, the court
14 Even if human intervention were the test, the record demonstrates thathuman beings are integrally involved throughout the RS-DVR Service. ( See supra note 9.)
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observed the similarity between an Internet access provider and a common carrier
that merely acts as a passive conduit for information. Id. at 1370 n.12 (comparing
Netcom to a telephone company). Similarly, in CoStar , the court explained that
mere passive ownership and management of an electronic Internet facility is not
conduct that has a nexus sufficiently close and causal to the illegal copying. 373
F.3d at 550. And in Playboy Enterprises, Inc. v. Webbworld, Inc. , 991
F. Supp. 543 (N.D. Tex. 1997), affd mem. , 168 F.3d 486 (5th Cir. 1999), the court
held that the critical test for direct infringement was whether an entity acted as a
mere passive conduit of unaltered information or took affirmative steps to
cause the copies to be made. Id. at 552 (quoting Netcom , 907 F. Supp. at
1381). 15 Thus, even under the Netcom cases, Cablevision cannot escape liability
for direct infringement unless its role in the RS-DVR Service is that of a passive
conduit.
But the undisputed facts demonstrate that Cablevision is anything but
a passive conduit. Unlike passive ISPs, Cablevision is the sole supplier of
copyrighted content for copying in the RS-DVR Service. (A1206-07.) Only one
15 Although Cablevision holds up Playboy Enterprises, Inc. v. Russ Harden-burgh, Inc. , 982 F. Supp. 503 (N.D. Ohio 1997), as an example of humanintervention (CV Br. 24), the court never applied such a test and instead relied onboth human and automated activities as evidence of defendants active par-ticipa[tion] in the infringement. 982 F. Supp. at 513.
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those must carry channels only as part of its regular linear programmingnot in
the RS-DVR Service.
Second , but for the small number of must carry channels, Cable-
vision exercises complete control over what channels are included in its regular
linear programming. As the Supreme Court has repeatedly held, cable operators
exercise a significant amount of editorial discretion regarding what their pro-
gramming will include. City of Los Angeles v. Preferred Commcns, Inc. , 476
U.S. 488, 494 (1986) (quoting FCC v. Midwest Video Corp. , 440 U.S. 689, 707
(1979)); see also Turner Broadcasting Sys., Inc. v. FCC , 512 U.S. 622, 636
(1994). 16 Similarly, as the District Court found, Cablevision has unfettered
discretion in selecting the programming that it would make available for recording
through the RS-DVR . . . . (SPA28-29.) Cablevision could, for example, exclude
Turners channels from the RS-DVR Service even while still including them as
part of its licensed linear programming. (SPA11, CA49, CA708, A1084, A1093,
A1207-09.)
16 Cablevisions reliance on the Courts decision in Eastern Microwave, Inc.v. Doubleday Sports, Inc. , 691 F.2d 125 (2d Cir. 1982), cert. denied , 459 U.S. 1226(1983), is misplaced. That case, which involved a carrier with the capacity toretransmit only one broadcast signal, interpreted the cable compulsory license of 17 U.S.C. 111 (for which Cablevision concedes the RS-DVR Service does notqualify)a context entirely distinct from the control over content contemplatedby Netcom and its progeny.
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There are numerous other reasons why the District Court was right to
conclude that Cablevision is not similarly situated to an ISP. (SPA28.) Unlike a
passive ISP, Cablevision cannot claim that it is unable to screen out infringing
content, see Netcom , 907 F. Supp. at 1369 n.12, 1372-73; CoStar , 373 F.3d at
550-51, or that it has engaged in ameliorating conduct with respect to the in-
fringement that would take place as part of the RS-DVR Service, see Netcom , 907
F. Supp. at 1368; CoStar , 373 F.3d at 547.
Nor can Cablevision claim, as passive ISPs can, that the copyright in-
fringement is incidental to a legitimate business such as providing Internet access,
on-line bulletin boards or Internet search engines. See cases cited in CV Br. at 21-
22. Copyright infringement lies at the heart of the RS-DVR Service. Cf.
Webbworld , 991 F. Supp. at 552 (holding website operator liable as direct infringer
under Netcom where website functioned primarily as a store for infringing
images). The whole point of the RS-DVR Service is to make copies of (and then
transmit) copyrighted programming. Indeed, the infringing aspect of the Service is
what makes it attractive to subscribers, and hence profitable for Cablevision.
C. Sony Is Legally and Factually Inapposite.
In an effort to distract from the facts of this case, Cablevision repeat-
edly invokes the Sony case. (CV Br. 16-18, 25, 29.) Sony , however, is legally and
factually inapposite, and provides no basis for protecting Cablevision from liability
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as a direct infringer. The District Court correctly held that Cablevisions reliance
on Sony is misguided. (SPA23.)
Sony addressed the fair use defense in the context of a contributory
infringement claim. 464 U.S. at 434-56. Here, there is no contributory infringe-
ment claim (A25, A1339), and Cablevision has expressly waived any fair use
defense to direct infringement (A57).
Cablevisions extended discussion of Sony s holding on contributory
infringement is based on the fundamentally mistaken premise that the Cablevision
subscriber is the only one engaged in copying activity in the RS-DVR Service.
Cablevision, in other words, assumes in its favor the central question presented for
resolution in this case: is Cablevision making infringing copies?
Unlike this case, Sony did not present a question as to who was doing
the copying. The Supreme Court proceeded on the uncontested assumption that
the consumer made copies with the Betamax and, given that assumption, addressed
whether Sony was a contributory infringer in the consumers copying. 464 U.S. at
435 n.17 (noting that direct infringement was not before the Court). Contrary to
Cablevisions suggestion (CV Br. 2-3), in Sony the Supreme Court did not render
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some sort of one-size-fits-all ruling that, no matter what the facts of the case may
be, the consumer is always doing the copying in the context of time-shifting. 17
Proceeding from the incorrect premise that Sony governs here (not-
withstanding that Sony explicitly did not address the central issue in this case),
Cablevision argues that its role in the RS-DVR Service could subject it to liability
only as a contributory infringer. Cablevision assumes, however, that direct and
contributory infringement are either/or propositions: either Cablevision is a direct
infringer or it is a contributory infringer. But that assumption is also mistaken. A
single defendant like Cablevision can be liable for both direct infringement and
contributory infringement, see, e.g. , Russ Hardenburgh , 982 F. Supp. at 513-14,
and multiple defendants can be liable for the same direct infringement, see, e.g. ,
Buck , 283 U.S. at 197-98. Thus, even if Cablevision could fit itself under Sony
which it cannotthat would be irrelevant to Cablevisions liability for direct
infringement.
Moreover, as the District Court correctly found, the RS-DVR and
VCR have little in common, and the relationship between Cablevision and
17 Accordingly, Professor Wus assertion that Sony/Grokster today is copy-rights system for assessing the market entry of user-directed copyingtechnologies is incorrect. (Wu Br. 6.) The longstanding line of copy shop casesalready discussed ( see supra Part I.A) provides the proper framework for evaluat-ing direct infringement claims where an alleged infringer makes copies at therequest of customers.
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potential RS-DVR customers is significantly different from the relationship
between Sony and VCR users. (SPA23.) In Sony , Sony did no more than provide
a machine (the Betamax) with which users could copy content; the only interaction
between Sony and the Betamax user was the point of sale. Sony did not, for
example, provide copyrighted content for copying. See Sony , 464 U.S. at 436
(noting that Sony [does] not supply Betamax consumers with respondents
[copyrighted] works). The Supreme Court itself has characterized the holding in
Sony as one concerning the design or distribution of a product. Metro-Goldwyn-
Mayer Studios Inc. v. Grokster, Ltd. , 545 U.S. 913, 933 (2005); see also Tasini ,
533 U.S. at 504 (describing Sonys holding as about the sale of copying
equipment (quoting Sony , 464 U.S. at 442)).
Cablevision does far more than just sell a piece of machinery in a one-
time interaction. Cablevision has an ongoing service relationship with its RS-DVR
Service subscribers that involves deciding which channels to make available for
recording and providing that copyrighted content; housing, operating, and
maintaining the equipment that makes the RS-DVR Services recording process
possible; sending the previously recorded streams from the head-end to the
subscribers home; monitoring the programming streams and ensuring that the
servers at the head-end are working properly; and charging subscribers a monthly
fee for the Service. Thus, Cablevisions extensive involvement in the RS-DVR
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Service is completely unlike Sonys limited actions in connection with the
Betamax. (SPA23-26.)
D. Cablevisions References to Set-Top DVR Boxes Are Unavailing.
Throughout its brief, Cablevision suggests that the set-top DVR box
provides a useful reference point for the Courts assessment of the RS-DVR
Service. It does not.
Cablevision argues that what it describes as [w]idespread
[a]cceptance of set-top DVR boxesproducts not before this Courtsomehow
makes the RS-DVR Service lawful. (CV Br. 26-27.) Failure to sue cable operators
for offering set-top DVR boxes, however, does not constitute an implicit conces-
sion of the legality of either set-top DVR boxes or the RS-DVR Service. 18 See
Capitol Records, Inc. v. Naxos of Am., Inc. , 372 F.3d 471, 484 (2d Cir. 2004)
([F]ailure to pursue third-party infringers has regularly been rejected as a defense
to copyright infringement or as an indication of abandonment.); Paramount
Pictures Corp. v. Carol Publg Group , 11 F. Supp. 2d 329, 336 (S.D.N.Y. 1998)
([T]he lack of earlier litigation against other similar works is simply irrelevant.),
affd mem. , 181 F.3d 83 (2d Cir. 1999). Cablevision fares no better by citing to
18 In fact, copyright owners have brought infringement actions against Inter-net-based copying and transmission services similar to Cablevisions, as well asagainst manufacturers of stand-alone DVRs that clearly ran afoul of Sonysprinciples. (A890-942.)
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cases that have considered acquiescence by government officials in construing the
meaning of an ambiguous statute. See United States v. State Bank of N.C. , 31 U.S.
(6 Pet.) 29, 39 (1832); Union Pac. R.R. v. Anderson , 120 P.2d 578, 587 (Or.
1941). Here, plaintiffs are not government officials, and Cablevision points to no
ambiguity in the Copyright Act that requires construction.
If any widespread acceptance should count here, it should be the
widespread acceptance by cable operators of the need to obtain licenses from
content providers to reproduce and transmit copyrighted programming. Cable-
vision has entered into affiliation agreements with Turner granting Cablevision a
license to transmit certain Turner networks as linear networks and narrowly
defining Cablevisions access and rights to Turners programming. (CA42-44,
CA435-51.) Cablevision concedes that a license is also required for VOD
transmissions. (CA44, CA132, CA134-38.) As the District Court found, the
RS-DVR bears striking resemblance to VODa service that Cablevision provides
pursuant to licenses negotiated with programming owners. (SPA26-27.) Thus,
the District Courts decision requiring Cablevision to negotiate a license to use
Turners programming as part of the RS-DVR Service comports with industry
practice.
Finally, Cablevisions analogy to the set-top DVR box is a false one
because Cablevision wrongly focuses on what the RS-DVR Service subscriber
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perceives, rather than what Cablevision does as part of the RS-DVR Service.
Cablevision asserts that a set-top DVR box and the RS-DVR Service are func-
tionally indistinguishable, relying entirely on the fact that they appear virtually
identical to the consumer. (CV Br. 26-28.) But the District Court made a factual
finding that the two technologies are vastly different. (SPA25.) Whereas a set-
top DVR box is under the users direct control and all of its functions take place in
the privacy of the users home, in direct response to a user command, the critical
functions in the RS-DVR Service take place at Cablevisions head-end facility, are
mediated by a network of hardware and software under Cablevisions control, and
occur in some cases without any subscriber request whatsoever. (SPA25-26.) In
the RS-DVR Service, Cablevision creates a separate stream of programming and
transmits it from its head-end over the cable lines to the node that includes the
requesting subscriber. (SPA17.) By contrast, a set-top DVR box makes no
transmissions to or from locations outside the home.
As Cablevision rightly notes, the issue is what Cablevision does . (CV
Br. 24.) And with respect to what Cablevision does (as opposed to what the
consumer perceives), the RS-DVR Service is nothing like a set-top DVR box.
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II. CABLEVISION MAKES UNAUTHORIZED COPIES OF TURNERSCOPYRIGHTED PROGRAMMING WITHOUT RECEIVING ANYSUBSCRIBER REQUESTS.
Cablevision does not dispute that it makes at least two sets of buffer
copies as part of the RS-DVR Service without receiving any individual subscriber
request. First , Cablevision makes buffer copies in the BMR clamper of bits of
every program on each linear network that it has decided to include in the RS-DVR
Service. Second , Cablevision makes copies in the primary ingestion buffers of the
Arroyo serveralso of bits of every program on each linear network that it has
decided to include in the RS-DVR Service. 19 Cablevision cannotand does not
argue that it is not directly responsible for making these buffer copies. Rather,
Cablevision contends that either the buffer copies are not fixed under the
Copyright Act or, if they are, Cablevision does not infringe because its copies are
de minimis . The District Court correctly rejected both of those arguments and held
that the buffer copies violate Turners exclusive right of reproduction pursuant to
17 U.S.C. 106(1).
19 Although the District Court found that [b]uffering takes place at severalpoints during the operation of the RS-DVR (SPA12), Turner focuses on the twosets of buffer copies described above, which are not associated with individualsubscriber requests, because they provide a basis for upholding the District Courts
judgment independent of the arguments set forth in Part I.
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A. The Buffer Copies Are Fixed.
The buffer copies that Cablevision makes as part of the RS-DVR
Service are fixed according to the definitions in the Copyright Act. The Act
defines copies as any material objects in which a work is fixed and from
which the work can be perceived, reproduced, or otherwise communicated, either
directly or with the aid of a machine or device. 17 U.S.C. 101. In turn, a work
is fixed if it is sufficiently permanent or stable to permit it to be perceived,
reproduced, or otherwise communicated for a period of more than transitory
duration. Id. The buffer copies in the RS-DVR Service are fixed because they
exist long enough to be reproduced for an indefinite period of time.
Cablevision does not dispute that computers make copies when they
load data into random access memory (RAM). See, e.g. , Stenograph L.L.C. v.
Bossard Assocs., Inc. , 144 F.3d 96, 101-02 (D.C. Cir. 1998); Triad Sys. Corp. v.
Se. Express Co. , 64 F.3d 1330, 1335 (9th Cir. 1995), cert. denied , 516 U.S. 1145
(1996); MAI Sys. Corp. v. Peak Computer, Inc. , 991 F.2d 511, 518-19 (9th Cir.
1993), cert. dismissed , 510 U.S. 1033 (1994). Nor does Cablevision dispute that
the buffer copies in the RS-DVR Service are loaded into RAM and are repro-
duced. Instead, Cablevision argues that the buffer copies themselves do not exist
for a period of more than transitory duration. (CV Br. 39.) That argument
misunderstands the definition of fixed. Exactly how long the buffer copies
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themselves persist is irrelevant because unquestionably they exist long enough to
be reproduced into copies lasting for a period of more than transito